Margin and Markup Calculator for Product Pricing
Calculate gross profit, margin, and markup from selling revenue and product cost to support consistent pricing and practical profitability decisions.
Enter selling price and product cost to calculate gross profit, profit margin, and markup for pricing decisions.
About margin versus markup
A margin and markup calculator exists because those two percentages are not interchangeable, yet they are often used as if they were. Profit margin is profit as a share of selling price. Markup is profit as a share of cost. A $100 price on a $60 cost produces $40 of profit, a 40% margin, and a 66.67% markup. If a buyer asks for a 40% markup and you deliver a 40% margin, you have given away a large slice of profit. The margin and markup calculator subtracts product cost from selling price to get gross profit. Margin divides that profit by selling price. Markup divides it by cost, and shows an em dash if cost is zero because markup is undefined. Both ratios are gross figures: they ignore operating expenses, payment fees, discounts, and taxes unless those items are already baked into the two inputs. Retail, wholesale, and manufacturing teams still rely on both numbers. Buyers and costing sheets often speak in markup from cost. Finance and income statements speak in margin on sales. Mapping one to the other is mechanical: margin = markup ÷ (1 + markup) when both are decimals, and markup = margin ÷ (1 − margin). The calculator skips that conversion algebra by computing both from the same price and cost. Pricing mistakes cluster around the base. A 50% markup on $60 is a $90 price, which is only a 33.33% margin. A 50% margin on $60 is a $120 price. If you target margin, solve for price as cost ÷ (1 − margin). If you target markup, price is cost × (1 + markup). Enter the resulting price here to confirm both percentages before you publish a list price. Use the margin and markup calculator to check a $100 / $60 standard case, an $80 / $50 wholesale quote, or a tighter $120 / $90 line. Compare the margin with category benchmarks and the markup with how you actually add cost. Confirm that cost includes freight and landed extras you intend to recover, because an incomplete cost overstates both ratios.
Profit = selling price − cost; margin = profit ÷ selling price × 100; markup = profit ÷ cost × 100.
Margin and markup examples
These worked examples use the same profit, margin, and markup formulas as the margin and markup calculator.
| Input | Output | Note |
|---|---|---|
| $100 selling price; $60 cost | 40.00% | Profit is $40.00, margin on price is 40.00%, and markup on cost is 66.67%. |
| $80 selling price; $50 cost | 60.00% | Profit is $30.00 and margin is 37.50%; the 60.00% figure is markup on the $50 cost. |
| $120 selling price; $90 cost | 25.00% | A tighter line earns $30.00 profit, a 25.00% margin, and a 33.33% markup. |
How to calculate margin and markup
- Enter the Selling Price you charge the customer, before optional discounts you have not applied yet.
- Enter Product Cost for the same unit, including landed cost if that is how you price.
- Select Calculate to see gross profit, profit margin on price, and markup on cost.
- Compare margin with your target on sales and markup with your costing sheet, then adjust price or cost and recalculate.
Margin and markup calculator FAQ
What is the difference between margin and markup?
Margin is profit divided by selling price. Markup is profit divided by cost. The same $40 profit is a 40% margin on a $100 price and a 66.67% markup on a $60 cost, so the percentages only match when cost equals price, which never happens on a profitable sale.
Which percentage should I use for product pricing?
Use margin when you care about share of revenue, which is how income statements report gross margin. Use markup when you build price from cost. Many teams track both so a buyer speaking in markup and a finance review speaking in margin do not talk past each other.
How do I convert markup to margin?
If markup is expressed as a decimal, margin = markup ÷ (1 + markup). A 50% markup (0.50) is a 33.33% margin. The reverse is markup = margin ÷ (1 − margin). The margin and markup calculator avoids the conversion by computing both from price and cost.
Why is markup blank when cost is zero?
Markup divides profit by cost, so a zero cost makes the ratio undefined. The calculator shows an em dash for markup in that case while still reporting profit and margin on the selling price.
Does the profit figure include operating expenses?
No. Gross profit here is selling price minus product cost only. Operating expenses, payment fees, and discounts need a broader margin calculator if you want net margin rather than this unit-level gross view.